Economist Peter Schiff has warned that the current banking crisis is the cusp of a much worse financial crisis. “It’s going to get a lot worse if you try to rule it out,” he emphasized. Citing the Federal Reserve’s recession forecast, he cautioned: “Normally, the Federal Reserve does not forecast a recession. So if they can actually see this coming, it probably means it’s going to be massive.”
Peter Schiff on the banking crisis, the financial crisis and the recession
Economist and gold lover Peter Schiff warned in a recent interview on Trader TV Live that the current banking crisis is not over and that a much worse financial crisis will follow.
Schiff explained that “everyone has talked about a banking crisis,” but “nobody wants to refer to it as a financial crisis.” She exclaimed: “No! This is a financial crisis. The financial crisis of 2008 was also a banking crisis, unless people forget that it was the banks that failed. The economist emphasized:
This is the height of the crisis. It’s going to get a lot worse if you’re going to try to dismiss it.
He compared the current crisis to the subprime crisis, noting that the Federal Reserve is saying, “It’s just a couple of banks. It’s just Silicon Valley Bank or Signature Bank or the other one that failed. That’s how when the first subprime explosion happened, no one wanted to admit it was a mortgage crisis. They just said, ‘Oh, it’s just contained in this handful of subprime mortgages. Don’t worry about it, there’s nothing to see here, it’s not a big deal, it’ll just fade away… That’s exactly what they’re saying right now: ‘This is nothing, it’s not a big deal.'” However, Schiff argument:
Its a big problem. it’s no big deal
Regarding the likelihood of big banks failing, Schiff said: “Those banks are also insolvent. It’s just that they’re too big to fail, so we won’t let them, but that just means we have to print a lot of money to keep them from failing.” However, he warned that the federal government’s bailout of Silicon Valley Bank and Signature Bank depositors, but not the smaller banks, “is going to create a run on these small banks,” stressing: “That’s going to create a big problem.”
Commenting on the Fed minutes released Wednesday, Schiff tweeted: “Based on their recent minutes, the Fed is no longer expecting a soft landing, but rather a mild recession. What makes the Fed think the recession will be mild? He continued:
Normally, the Fed does not forecast a recession. So if they can actually see this coming, it probably means it’s going to be massive.
Do you agree with Peter Schiff? Let us know in the comments section.
image credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or a solicitation of an offer to buy or sell, or a recommendation or endorsement of any product, service or company. bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
